Evaluating a seasonal fuel tax in a mass tourism destination: A case study for the Balearic Islands

Mohcine Bakhat and Jaume Rossello ()

Energy Economics, 2013, vol. 38, issue C, 12-18

Abstract: This paper estimates the monthly aggregate demand for diesel oil and gasoline in a mass tourism region, characterized for a high level of seasonality. Using time series models, price elasticities are estimated with special emphasis in evaluating differences between seasons in order to assess the consequences of a fuel tax applied exclusively during the high season. Using the case study of the Balearic Islands (Spain) from January-1999 to December-2010 results from a partial adjustment model show a relatively low price-elasticity, evidencing how the internalizing mechanism that could be argued for introducing the tax in order to reduce transport externalities does not work. Additionally no statistical differences have been found between seasons for both fuels invalidating the argument that tourism activity reacts differently to host activity.

Keywords: Diesel oil demand; Gasoline demand; Tourism; Fuel tax (search for similar items in EconPapers)
JEL-codes: L83 O13 R48 R58 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:38:y:2013:i:c:p:12-18

DOI: 10.1016/j.eneco.2013.02.009

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